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Michael Pernici

Low Taxes and Competitive Business Climate for Manufacturers

Louisiana’s low-tax environment offers manufacturers significant cost savings. According to a 50-state analysis by the Tax Foundation and KPMG: Location Matters: The State Tax Costs of Doing Business, Louisiana ranks as the lowest tax burden for new facilities, relocations, and facility expansions for both capital-intensive and labor-intensive manufacturing operations in the U.S. The total effective tax rate (based on all state and local taxes including income tax, franchise tax, sales tax and property tax) is less than one percent.

For this unique study, an appropriate example company was identified for each scenario. Assumptions were made around the number of employees by function, salaries, capital investment, revenue, profit and the amount of property, payroll and sales in the state. This methodology provided an apples-to-apples comparison of corporate tax costs across all 50 states.

Low Utility Rates

A location in Louisiana can reduce company costs because of the state’s low industrial electricity rates — 2017 rates averaged approximately 22 percent below the national average.

Louisiana’s industrial natural gas rates are also highly competitive, with the state’s 2017 rates averaging the lowest in the South and approximately 10 percent below the national average.